<PAGE> 1
As filed with the Securities and Exchange Commission on June 2, 1999
Registration No. 333- _______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VERITAS SOFTWARE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 77-0507675
(State of Incorporation) (I.R.S. Employer Identification No.)
------------------------
1600 PLYMOUTH STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(Address of Principal Executive Office, Including Zip Code)
------------------------
OPTIONS GRANTED UNDER 1985 STOCK OPTION PLAN
OF VERITAS SOFTWARE CORPORATION, ASSUMED BY REGISTRANT
OPTIONS GRANTED UNDER 1991 EXECUTIVE STOCK OPTION PLAN
OF VERITAS SOFTWARE CORPORATION, ASSUMED BY REGISTRANT
OPTIONS GRANTED UNDER 1992 STOCK PLAN
OF OPENVISION TECHNOLOGIES, INC., ASSUMED BY REGISTRANT
1993 EQUITY INCENTIVE PLAN
OF VERITAS SOFTWARE CORPORATION,
AND OPTIONS GRANTED THEREUNDER, ASSUMED BY REGISTRANT
1993 DIRECTORS STOCK OPTION PLAN
OF VERITAS SOFTWARE CORPORATION,
AND OPTIONS GRANTED THEREUNDER, ASSUMED BY REGISTRANT
1993 EMPLOYEE STOCK PURCHASE PLAN
OF VERITAS SOFTWARE CORPORATION,
AND OPTIONS GRANTED THEREUNDER, ASSUMED BY REGISTRANT
OPTIONS GRANTED UNDER 1996 STOCK OPTION PLAN
OF SEAGATE SOFTWARE, INC., ASSUMED BY REGISTRANT
(Full Title of the Plans)
------------------------
MARK LESLIE
CHIEF EXECUTIVE OFFICER
VERITAS SOFTWARE CORPORATION
1600 PLYMOUTH STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 335-8000
(Name, Address and Telephone Number of Agent for Service)
------------------------
Copies to:
HORACE L. NASH, ESQ.
DARREN L. NUNN, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Amount Proposed Maximum Proposed Maximum
Title of Securities to be to be Offering Price Per Aggregate Offering Amount of
Registered Registered Share Price Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 7,935,153(1) $27.30(5) $ 216,629,676 $ 60,223
Common Stock 5,199,900(2) $ 9.99(6) $ 51,947,001 $ 14,441
Common Stock 7,379,703(3) $78.88(7) $ 582,110,972 $161,826
Common Stock 2,942,187(4) $78.88(7) $ 232,079,710 $ 64,518
Total: -- $1,082,767,359 $301,008(8)
</TABLE>
FOOTNOTES
(1) Shares subject to outstanding options under the VERITAS Software
Corporation 1985 Stock Option Plan, the VERITAS Software Corporation
1991 Executive Stock Option Plan, the OpenVision Technologies, Inc.
1992 Stock Plan, the VERITAS Software Corporation 1993 Equity
Incentive Plan and the VERITAS Software Corporation 1993 Directors
Stock Option Plan.
(2) Shares subject to outstanding options issuable upon exchange for
options granted under the Seagate Software, Inc. 1996 Stock Option
Plan.
(3) Shares reserved for issuance and not yet subject to options under the
VERITAS Software Corporation 1993 Equity Incentive Plan and the
VERITAS Software Corporation 1993 Directors Stock Option Plan.
(4) Shares reserved for issuance under the VERITAS Software Corporation
1993 Employee Stock Purchase Plan.
(5) Weighted average per share exercise price of outstanding options on
May 28, 1999 under the plans referenced in footnote (1) above
determined pursuant to Rule 457(h)(1) for the purpose of calculating
the registration fee.
(6) Weighted average per share exercise price of outstanding options
issuable upon exchange for options granted under the plan referenced
in footnote (2) above determined pursuant to Rule 457(h)(1) for the
purpose of calculating the registration fee.
(7) Average of the high and low trading prices of VERITAS Software
Corporation common stock as reported on Nasdaq on May 25, 1999
determined pursuant to Rule 457(c) and Rule 457(h)(1) for the
purpose of calculating the registration fee.
(8) Pursuant to Rule 457(b), $114,067 of the registration fee is
offset by the filing fee previously paid by Registrant in connection
with the filing on April 19, 1999 of its Registration Statement on
Form S-4 (File No. 333-76531).
<PAGE> 3
PART II. Information not required in the Registration Statement.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's Joint Proxy Statement/Prospectus contained
in the Registration Statement on Form S-4 (Commission File
No. 333-76531), filed on April 19, 1999 pursuant to Rule
424(b) promulgated under the Securities Act of 1933, as
amended (the "Securities Act")("Form S-4").
(b) The description of the Registrant's Common Stock
incorporated by reference in the Registrant's Registration
Statement on Form 8-A filed with the Commission under
Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on June 1, 1999 ("Form 8-A"),
including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed incorporated by reference herein and to be a part hereof from the date
of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a
court to award, or a corporation's board of directors to grant, indemnity to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act.
As permitted by the Delaware General Corporation Law, the
Registrant's restated certificate of incorporation includes a provision that
eliminates the personal liability of its directors for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Registrant or its stockholders, (ii)
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law, (iii) under section 174 of the Delaware General
Corporation Law (regarding unlawful dividends and stock purchases) or (iv) for
any transaction from which the director derived an improper personal benefit.
As permitted by the Delaware General Corporation Law, the bylaws of
the Registrant provide that (i) the Registrant is required to indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to certain very limited exceptions, (ii) the Registrant
may indemnify its other employees and agents as set forth in the Delaware
General Corporation Law, (iii) the Registrant is required to advance expenses,
as incurred, to its directors and officers in connection with a legal proceeding
to the fullest extent permitted by the Delaware General Corporation Law, subject
to certain very limited exceptions and (iv) the rights conferred in the bylaws
are not exclusive.
The indemnification provisions in the bylaws and the indemnification
agreements to be entered into between the Registrant and its directors and
officers may be sufficiently broad to permit indemnification of the Registrant's
directors and officers for liabilities arising under the Securities Act. The
Registrant intends to enter into
II-1
<PAGE> 4
indemnification agreements with each of its current directors and executive
officers to give such directors and officers additional contractual assurances
regarding the scope of the indemnification set forth in the Registrant's
restated certificate of incorporation and to provide additional procedural
protections. At present, there is no pending litigation or proceeding involving
a director, officer or employee of the Registrant regarding which
indemnification is sought, nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification.
In connection with the acquisition by the Registrant of the Seagate
Software Network & Storage Management Group business, the Registrant agreed to
maintain indemnification provisions in its charter documents that are identical
to provisions contained in the charter documents of the Registrant's predecessor
corporation. The Registrant also agreed to honor in all respects each of the
indemnity agreements that its predecessor entered into with its officers and
directors before the acquisitions whether or not such persons continue in their
positions with the Registrant and to use commercially reasonable efforts to
maintain director and officer liability insurance with coverages similar to the
coverages its predecessor maintained prior to the acquisition for at least six
years after the effective time. These covenants are contained in the Amended and
Restated Agreement and Plan of Reorganization attached as Appendix A to the Form
S-4 under the heading "Indemnification and Insurance - VERITAS."
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
4.01 Registrant's Restated Certificate of Incorporation, as
amended (incorporated herein by reference to Exhibits 3.01
and 3.02 of the Form 8-A).
4.02 Registrant's Bylaws (incorporated herein by reference to
Exhibit 3.03 of the Form 8-A).
4.03 VERITAS Software Corporation 1985 Stock Option Plan, as
amended (incorporated herein by reference to Exhibit 10.01
of the VERITAS Software Corporation Registration Statement
on Form S-1 (File No. 33-70726) filed with the Commission
on October 22, 1993 ("1993 Form S-1")).
4.04 VERITAS Software Corporation 1991 Executive Stock Option
Plan, as amended (incorporated herein by reference to
Exhibit 10.02 of the 1993 Form S-1).
4.05 OpenVision Technologies, Inc. 1992 Stock Plan, as amended
(incorporated herein by reference to Exhibit 10.02 of the
OpenVision Technologies, Inc. Registration Statement on
Form S-1 (File No. 333-01724) declared effective on May 7,
1996.
4.06 VERITAS Software Corporation 1993 Equity Incentive Plan,
as amended.
4.07 VERITAS Software Corporation 1993 Employee Stock Purchase
Plan, as amended.
4.08 VERITAS Software Corporation 1993 Directors Stock Option
Plan, as amended (incorporated herein by reference to
Exhibit 10.04 of the VERITAS Software Corporation
Registration Statement on Form S-4 (File No. 333-23859)
filed with the Commission on March 24, 1997).
4.09 Seagate Software, Inc. 1996 Stock Option Plan, as amended.
II-2
<PAGE> 5
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of independent auditors.
24.01 Power of Attorney (see page II-4).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement to include any material information
with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material
change to such information in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions discussed in Item 6 hereof, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered hereby,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mountain View, County of Santa Clara, State of
California, on the 1st day of June, 1999.
VERITAS SOFTWARE CORPORATION
By: /s/ MARK LESLIE
----------------------------
Mark Leslie
Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints Mark Leslie, Ken Lonchar and Jay Jones,
and each or any one of them, his true and lawful attorneys-in-fact and agents
with full power of substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-8, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
II-4
<PAGE> 7
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
Chief Executive Officer and June 1, 1999
/s/ MARK LESLIE Chairman of the Board
- -------------------------------------
Mark Leslie
PRINCIPAL FINANCIAL AND
PRINCIPAL ACCOUNTING OFFICER:
Senior Vice President, Finance and June 1, 1999
/s/ KENNETH LONCHAR Chief Financial Officer
- -------------------------------------
Kenneth Lonchar
ADDITIONAL DIRECTORS:
/s/ FRED VAN DEN BOSCH
- ------------------------------------- Director June 1, 1999
Fred van den Bosch
/s/ STEVEN BROOKS
- ------------------------------------- Director June 1, 1999
Steven Brooks
/s/ TERENCE R. CUNNINGHAM
- ------------------------------------- Director June 1, 1999
Terence R. Cunningham
/s/ WILLIAM H. JANEWAY
- ------------------------------------- Director June 1, 1999
William H. Janeway
/s/ GREGORY B. KERFOOT
- ------------------------------------- Director June 1, 1999
Gregory B. Kerfoot
/s/ STEPHEN J. LUCZO
- ------------------------------------- Director June 1, 1999
Stephen J. Luczo
- ------------------------------------- Director ______, 1999
Joseph D. Rizzi
/s/ GEOFFREY W. SQUIRE
- ------------------------------------- Director June 1, 1999
Geoffrey W. Squire
</TABLE>
II-5
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
4.06 VERITAS Software Corporation 1993 Equity Incentive Plan, as
amended.
4.07 VERITAS Software Corporation 1993 Employee Stock Purchase Plan,
as amended.
4.09 Seagate Software, Inc. 1996 Stock Option Plan, as amended.
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of independent auditors.
24.01 Power of Attorney (see page II-4).
</TABLE>
II-6
<PAGE> 1
EXHIBIT 4.06
VERITAS SOFTWARE CORPORATION
1993 EQUITY INCENTIVE PLAN
AS ADOPTED OCTOBER 1, 1993, AMENDED APRIL 22, 1994, APRIL 20, 1995,
JANUARY 12, 1997 AND AS AMENDED ON MAY 27, 1999
1. Purpose. The purpose of the Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent, Subsidiaries and
Affiliates, by offering them an opportunity to participate in the Company's
future performance through awards of Options, Restricted Stock and Stock
Bonuses. Capitalized terms not defined in the text are defined in Section 24.
2. Shares Subject to the plan.
2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the
total number of Shares reserved and available for grant and issuance pursuant to
the Plan shall be 16,000,000 Shares. In addition, on each January 1, the
aggregate number of shares of the Company's Common Stock reserved for issuance
under this Plan shall be increased automatically by a number of shares equal to
four and one-half percent (4 1/2%) of the total outstanding shares of the
Company as of the immediately preceding December 31; provided, however, that
such increase shall in no event exceed 8,000,000 shares per year. Any Shares
issuable upon exercise of options granted pursuant to the Company's 1991
Executive Stock Option Plan, and the Company's 1985 Stock Option Plan (the
"Prior Plans") that expire or become unexercisable for any reason without having
been exercised in full, shall no longer be available for distribution under the
Prior Plans, but shall be available for distribution under this Plan. Subject to
Sections 2.2 and 18, Shares shall again be available for grant and issuance in
connection with future Awards under the Plan that: (a) are subject to issuance
upon exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option, (b) are subject to an Award granted
hereunder but are forfeited or are repurchased by the Company at the original
issue price, or (c) are subject to an Award that otherwise terminates without
Shares being issued. The total number of Shares issued under the Plan upon
exercise of ISOs will in no event exceed 50,000,000 Shares (adjusted in
proportion to any adjustment under Section 2.2 below) over the term of the Plan.
2.2 Adjustment of Shares. In the event that the number of outstanding
Shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under the Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards shall be proportionately adjusted, subject
to any required action by the Board or the shareholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of
a Share shall not be issued but shall either be paid in cash at Fair Market
Value or shall be rounded up to the nearest Share, as determined by the
Committee; and provided, further, that the Exercise Price of any Option may not
be decreased to below the par value of the Shares.
3. Eligibility. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees,
1
<PAGE> 2
officers, directors, consultants, independent contractors and advisers of the
Company or any Parent, Subsidiary or Affiliate of the Company; provided such
consultants, contractors and advisers render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. "Named Executive Officers" (as that term is defined in Item
402(a)(3) of Regulation S-K promulgated under the Exchange Act) shall each be
eligible to receive up to an aggregate maximum of 300,000 Shares at any time
during the term of this Plan pursuant to the grant of Awards hereunder, not to
exceed 300,000 Shares during any one twelve (12) month period. A person may be
granted more than one Award under the Plan.
4. Administration.
4.1 Committee Authority. The Plan shall be administered by the
Committee or the Board acting as the Committee. Subject to the general purposes,
terms and conditions of the Plan, and to the direction of the Board, the
Committee shall have full power to implement and carry out the Plan. The
Committee shall have the authority to:
(a) construe and interpret the Plan, any Award Agreement and any
other agreement or document executed pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations relating to
the Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject
to Awards;
(f) determine whether Awards will be granted singly, in
combination, in tandem, in replacement of, or as alternatives to, other Awards
under the Plan or any other incentive or compensation plan of the Company or any
Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the
administration of the Plan.
4.2 Committee Discretion. Any determination made by the Committee with
respect to any Award shall be made in its sole discretion at the time of grant
of the Award or, unless in contravention of any express term of the Plan or
Award, at any later time, and such determination shall be final and binding on
the Company and all persons having an interest in any Award under the Plan. The
Committee may delegate to one or more officers of the Company the authority to
grant an Award under the Plan to Participants who are not Insiders of the
Company.
4.3 Compliance With Code Section 162m. If two or more members of the
Board are Outside Directors, the Committee shall be comprised of at least two
members of the Board, all of whom are Outside Directors.
2
<PAGE> 3
5. Options. The Committee may grant Options to eligible persons and shall
determine whether such Options shall be Incentive Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under the Plan shall be
evidenced by an Award Agreement which shall expressly identify the Option as an
ISO or NQSO ("Stock Option Agreement"), and be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
shall from time to time approve, and which shall comply with and be subject to
the terms and conditions of the Plan.
5.2 Date of Grant. The date of grant of an Option shall be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
the Plan will be delivered to the Participant within a reasonable time after the
granting of the Option.
5.3 Exercise Period. Options shall be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement; provided, however, that no Option shall be exercisable after the
expiration of one hundred twenty (120) months from the date the Option is
granted, and provided further that no Option granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary of the
Company ("Ten Percent Shareholder") shall be exercisable after the expiration of
five (5) years from the date the Option is granted. The Committee also may
provide for the exercise of Options to become exercisable at one time or from
time to time, periodically or otherwise, in such number or percentage as the
Committee determines.
5.4 Exercise Price. The Exercise Price shall be determined by the
Committee when the Option is granted and may be not less than 85% of the Fair
Market Value of the Shares on the date of grant; provided that (i) the Exercise
Price of an ISO shall be not less than 100% of the Fair Market Value of the
Shares on the date of grant and (ii) the Exercise Price of any Option granted to
a Ten Percent Shareholder shall not be less than 110% of the Fair Market Value
of the Shares on the date of grant. Payment for the Shares purchased may be made
in accordance with Section 8 of the Plan.
5.5 Method of Exercise. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant's investment intent and access to information,
if any, as may be required or desirable by the Company to comply with applicable
securities laws, together with payment in full of the Exercise Price for the
number of Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option shall always be subject to the
following:
(a) If the Participant is Terminated for any reason except death or
Disability, then Participant may exercise such Participant's Options only to the
extent that such Options would have been exercisable upon the Termination Date
no later than ninety
3
<PAGE> 4
(90) days after the Termination Date (or such shorter time period as may be
specified in the Stock Option Agreement), but in any event, no later than the
expiration date of the Options.
(b) If the Participant is terminated because of death or Disability
(or the participant dies within three months of such termination), then
Participant's Options may be exercised only to the extent that such Options
would have been exercisable by Participant on the Termination Date and must be
exercised by Participant (or Participant's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date (or such
shorter time period as may be specified in the Stock Option Agreement), but in
any event no later than the expiration date of the Options.
5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISOs are exercisable for
the first time by a Participant during any calendar year (under the Plan or
under any other incentive stock option plan of the Company or any Affiliate,
Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair
Market Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
$100,000, the Options for the first $100,000 worth of Shares to become
exercisable in such calendar year shall be ISOs and the Options for the amount
in excess of $100,000 that become exercisable in that calendar year shall be
NQSOs. In the event that the Code or the regulations promulgated thereunder are
amended after the Effective Date of the Plan to provide for a different limit on
the Fair Market Value of Shares permitted to be subject to ISOs, such different
limit shall be automatically incorporated herein and shall apply to any Options
granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of Participant, impair any of Participant's rights under any
Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding Options
without the consent of Participants affected by a written notice to them;
provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 5.4 of the Plan for Options
granted on the date the action is taken to reduce the Exercise Price; provided,
further, that the Exercise Price shall not be reduced below the par value of the
Shares, if any.
5.10 No Disqualification. Notwithstanding any other provision in the
Plan, no term of the Plan relating to ISOs shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. Restricted Stock. A Restricted Stock Award is an offer by the Company to
sell to an eligible person Shares that are subject to restrictions. The
Committee shall determine to whom an offer will be made, the number of Shares
the person may purchase, the price to
4
<PAGE> 5
be paid (the "Purchase Price"), the restrictions to which the Shares shall be
subject, and all other terms and conditions of the Restricted Stock Award,
subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a Restricted
Stock Award made pursuant to the Plan shall be evidenced by an Award Agreement
("Restricted Stock Purchase Agreement") that shall be in such form (which need
not be the same for each Participant) as the Committee shall from time to time
approve, and shall comply with and be subject to the terms and conditions of the
Plan. The offer of Restricted Stock shall be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date the
Restricted Stock Purchase Agreement is delivered to the person. If such person
does not execute and deliver the Restricted Stock Purchase Agreement along with
full payment for the Shares to the Company within thirty (30) days, then the
offer shall terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award shall be determined by the Committee and shall be at
least 85% of the Fair Market Value of the Shares when the Restricted Stock Award
is granted, except in the case of a sale to a Ten Percent Shareholder, in which
case the Purchase Price shall be 100% of the Fair Market Value. Payment of the
Purchase Price may be made in accordance with Section 8 of the Plan.
6.3 Restrictions. Restricted Stock Awards shall be subject to such
restrictions as the Committee may impose. The Committee may provide for the
lapse of such restrictions in installments and may accelerate or waive such
restrictions, in whole or part, based on length of service, performance or such
other factors or criteria as the Committee may determine.
7. Stock Bonuses.
7.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which
may consist of Restricted Stock) for services rendered to the Company or any
Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may be awarded for
past services already rendered to the Company, or any Parent, Subsidiary or
Affiliate of the Company pursuant to an Award Agreement (the "Stock Bonus
Agreement") that shall be in such form (which need not be the same for each
Participant) as the Committee shall from time to time approve, and shall comply
with and be subject to the terms and conditions of the Plan. A Stock Bonus may
be awarded upon satisfaction of such performance goals as are set out in advance
in Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that shall be in such form (which need not be the same for each
Participant) as the Committee shall from time to time approve, and shall comply
with and be subject to the terms and conditions of the Plan. Stock Bonuses may
vary from Participant to Participant and between groups of Participants, and may
be based upon the achievement of the Company, Parent, Subsidiary or Affiliate
and/or individual performance factors or upon such other criteria as the
Committee may determine.
7.2 Terms of Stock Bonuses. The Committee shall determine the number of
Shares to be awarded to the Participant and whether such Shares shall be
Restricted Stock. If the Stock Bonus is being earned upon the satisfaction of
performance goals pursuant to a Performance Stock Bonus Agreement, then the
Committee shall determine: (a) the nature, length and starting date of any
period during which performance is to be measured (the "Performance Period") for
each Stock Bonus; (b) the performance goals and criteria to be used to measure
the performance, if any; (c) the number of Shares that
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may be awarded to the Participant; and (d) the extent to which such Stock
Bonuses have been earned. Performance Periods may overlap and Participants may
participate simultaneously with respect to Stock Bonuses that are subject to
different Performance Periods and different performance goals and other
criteria. The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The
Committee may adjust the performance goals applicable to the Stock Bonuses to
take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.
7.3 Form of Payment. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine. Payment may be made in the form of cash,
whole Shares, including Restricted Stock, or a combination thereof, either in a
lump sum payment or in installments, all as the Committee shall determine.
7.4 Termination During Performance Period. If a Participant is
Terminated during a Performance Period for any reason, then such Participant
shall be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Stock Bonus only to the extent earned as of the date of Termination in
accordance with the Performance Stock Bonus Agreement, unless the Committee
shall determine otherwise.
8. Payment for Share Purchases.
8.1 Payment. Payment for Shares purchased pursuant to the Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of Shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Company by
use of a promissory note, such note has been fully paid with respect to such
Shares); or (2) were obtained by Participant in the public market;
(c) by tender of a full recourse promissory note having such terms
as may be approved by the Committee and bearing interest at a rate sufficient to
avoid imputation of income under Sections 483 and 1274 of the Code; provided,
however, that Participants who are not employees of the Company shall not be
entitled to purchase Shares with a promissory note unless the note is adequately
secured by collateral other than the Shares; provided, further, that the portion
of the Purchase Price equal to the par value of the Shares, if any, must be paid
in cash;
(d) by waiver of compensation due or accrued to Participant for
services rendered;
(e) by tender of property;
(f) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from Participant and
a broker-dealer that is a member of the National Association of Securities
Dealers (a "NASD Dealer") whereby Participant irrevocably elects to exercise the
Option and to sell
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a portion of the Shares so purchased to pay for the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(2) through a "margin" commitment from Participant and a NASD
Dealer whereby Participant irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company;
or
(g) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the Participant pay for
Shares purchased under the Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant.
9. Withholding Taxes.
9.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under the Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under the Plan, payments
in satisfaction of Awards are to be made in cash, such payment shall be net of
an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
9.2 Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date"). All elections by a Participant to have Shares withheld for
this purpose shall be made in writing in a form acceptable to the Committee and
shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax
Date;
(b) once made the election shall be irrevocable as to the
particular Shares as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of
the Committee.
10. Privileges of Stock Ownership.
10.1 Voting and Dividends. No Participant shall have any of the rights
of a shareholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant shall
be a shareholder and have all the rights of a shareholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a
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stock dividend, stock split or any other change in the corporate or capital
structure of the Company shall be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant shall have no right to
retain such dividends or distributions with respect to Shares that are
repurchased at the Participant's original Purchase Price pursuant to Section 12.
10.2 Financial Statements. The Company shall provide financial
statements to each Participant prior to such Participant's purchase of Shares
under the Plan, and to each Participant annually during the period such
Participant has Options outstanding; provided, however, the Company shall not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
11. Transferability. Awards granted under the Plan, and any interest
therein, shall not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution or as consistent with the specific
Plan and Award Agreement provisions relating thereto. During the lifetime of the
Participant an Award shall be exercisable only by the Participant, and any
elections with respect to an Award, may be made only by the Participant.
12. Restrictions on Shares. At the discretion of the Committee, the Company
may reserve to itself and/or its assignee(s) in the Award Agreement (a) a right
of first refusal to purchase all Shares that a Participant (or a subsequent
transferee) may propose to transfer to a third party, and/or (b) a right to
repurchase a portion of or all Shares held by a Participant following such
Participant's Termination at any time within ninety (90) days after the later of
Participant's Termination Date and the date Participant purchases Shares under
the Plan, for cash or cancellation of purchase money indebtedness, at: (A) with
respect to Shares that are "Vested" (as defined in the Award Agreement), the
higher of: (l) Participant's original Purchase Price, or (2) the Fair Market
Value of such Shares on Participant's Termination Date, provided, such right of
repurchase terminates when the Company's securities become publicly traded; or
(B) with respect to Shares that are not "Vested" (as defined in the Award
Agreement), at the Participant's original Purchase Price, provided, that the
right to repurchase at the original Purchase Price lapses at the rate of at
least 20% per year over 5 years from the date the Shares were purchased, and if
the right to repurchase is assignable, the assignee must pay the Company, upon
assignment of the right to repurchase, cash equal to the excess of the Fair
Market Value of the Shares over the original Purchase Price.
13. Certificates. All certificates for Shares or other securities delivered
under the Plan shall be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed.
14. Escrow; Pledge of Shares. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant
who is permitted to execute a promissory note as partial or full consideration
for the
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purchase of Shares under the Plan shall be required to pledge and deposit with
the Company all or part of the Shares so purchased as collateral to secure the
payment of Participant's obligation to the Company under the promissory note;
provided, however, that the Committee may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company shall have full recourse against the Participant under the
promissory note notwithstanding any pledge of the Participant's Shares or other
collateral. In connection with any pledge of the Shares, Participant shall be
required to execute and deliver a written pledge agreement in such form as the
Committee shall from time to time approve. The Shares purchased with the
promissory note may be released from the pledge on a prorata basis as the
promissory note is paid.
15. Exchange and Buyout of Awards. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant shall agree.
16. Securities Law and Other Regulatory Compliance. An Award shall not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed, as they are in effect on the date of grant of the
Award and also on the date of exercise or other issuance. Notwithstanding any
other provision in the Plan, the Company shall have no obligation to issue or
deliver certificates for Shares under the Plan prior to (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable, and/or (b) completion of any registration or other qualification
of such shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company shall be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
shall have no liability for any inability or failure to do so.
17. No Obligation to Employ. Nothing in the Plan or any Award granted under
the Plan shall confer or be deemed to confer on any Participant any right to
continue in the employ of, or other relationship with, the Company or any
Parent, Subsidiary or Affiliate of the Company or limit in any way the right of
the Company or any Parent, Subsidiary or Affiliate of the Company to terminate
Participant's employment or other relationship at any time, with or without
cause.
18. Corporate Transactions.
18.1 Assumption or Replacement of Awards by Successor. In the event of
(a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the shareholders of
the Company and the Awards granted under the Plan are assumed or replaced by the
successor corporation, which assumption shall be binding on all Participants),
(b) a dissolution or liquidation of the Company, (c) the sale of substantially
all of the assets of the Company, or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company
(except
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for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may be assumed
or replaced by the successor corporation, which assumption or replacement shall
be binding on all Participants. In the alternative, the successor corporation
may substitute equivalent Awards or provide substantially similar consideration
to Participants as was provided to shareholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject repurchase restrictions
no less favorable to the Participant.
18.2 Expiration of Options. In the event such successor corporation, if
any, refuses to assume or substitute the Options, as provided above, pursuant to
a transaction described in Subsection 18.1(a) above, such Options shall expire
on such transaction at such time and on such conditions as the Board shall
determine. In the event such successor corporation, if any, refuses to assume or
substitute the Options as provided above, pursuant to a transaction described in
Subsections 18.1(b), (c) or (d) above, or there is no successor corporation, and
if the Company ceases to exist as a separate corporate entity, then,
notwithstanding any contrary terms in the Award Agreement, the Options shall
expire on a date at least twenty (20) days after the Board gives written notice
to Participants specifying the terms and conditions of such termination.
18.3 Other Treatment of Awards. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 18, in the event
of the occurrence of any transaction described in Section 18.1, any outstanding
Awards shall be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
18.4 Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either (a) granting an Award under the Plan in substitution of
such other company's award, or (b) assuming such award as if it had been granted
under the Plan if the terms of such assumed award could be applied to an Award
granted under the Plan. Such substitution or assumption shall be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
18.5 Acceleration of Officer Options. The Committee in its sole
discretion may grant Options to certain officers under which the vesting will
accelerate upon the occurrence of a transaction described in Subsections
18.1(a), 18.1(b), 18.1(c) or 18.1(d) above in which there is a successor
corporation, as to an additional 1/48th of the Shares subject to such Options
for each month of employment the officer completed with the Company from the
date of the grant to the date of transaction. In addition, the vesting of such
Options shall accelerate for an additional twenty four months at the rate of
1/48th of the Shares subject to such option; provided that: (i) if requested to
do so, the officer remains employed with the successor for a period of six
months following the date of such
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transaction or (ii) the officer is not requested to remain with the successor
following the date of such transaction.
19. Adoption and Shareholder Approval. The Plan shall become effective on
the date that it is adopted by the Board (the "Effective Date"). The Plan shall
be approved by the shareholders of the Company (excluding Shares issued pursuant
to this Plan), consistent with applicable laws, within twelve months before or
after the Effective Date. Upon the Effective Date, the Board may grant Awards
pursuant to the Plan; provided, however, that: (a) no Option may be exercised
prior to initial shareholder approval of the Plan; (b) no Option granted
pursuant to an increase in the number of Shares approved by the Board shall be
exercised prior to the time such increase has been approved by the shareholders
of the Company; and (c) in the event that shareholder approval is not obtained
within the time period provided herein, all Awards granted hereunder shall be
cancelled, any Shares issued pursuant to any Award shall be cancelled and any
purchase of Shares hereunder shall be rescinded.
20. Term of Plan. The Plan will terminate ten (10) years from the Effective
Date or, if earlier, the date of shareholder approval.
21. Amendment or Termination of Plan. The Board may at any time terminate
or amend the Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to the Plan;
provided, however, that the Board shall not, without the approval of the
shareholders of the Company, amend the Plan in any manner that requires such
shareholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.
22. Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board, the submission of the Plan to the shareholders of the Company for
approval, nor any provision of the Plan shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
23. Governing Law. The Plan and all agreements, documents and instruments
entered into pursuant to the Plan shall be governed by and construed in
accordance with the internal laws of the State of California, excluding that
body of law pertaining to conflict of laws.
24. Definitions. As used in the Plan, the following terms shall have the
following meanings:
"Affiliate" means any corporation that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
"Award" means any award under the Plan, including any Option, Restricted
Stock or Stock Bonus.
"Award Agreement" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
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"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee appointed by the Board to administer the
Plan, or if no committee is appointed, the Board.
"Company" means VERITAS Software Corporation, a corporation organized
under the laws of the State of California, any successor corporation thereto and
any corporation that assumes the Plan.
"Disability" means a disability, whether temporary or permanent, partial
or total, within the meaning of Section 22(e)(3) of the Code, as determined by
the Committee.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National
Market, its last reported sale price on the Nasdaq National Market or, if no
such reported sale takes place on such date, the average of the closing bid and
asked prices;
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, the last reported sale price or, if no such
reported sale takes place on such date, the average of the closing bid and asked
prices on the principal national securities exchange on which the Common Stock
is listed or admitted to trading;
(c) if such Common Stock is publicly traded but is not quoted on
the Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on such
date, as reported by The Wall Street Journal, for the over-the-counter market;
or
(d) if none of the foregoing is applicable, by the Board of
Directors of the Company in good faith.
"Insider" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.
"Option" means an award of an option to purchase Shares pursuant to
Section 5.
"Outside Director" means any director who is not (i) a current employee
of the Company or any Parent, Subsidiary or Affiliate of the Company; (ii) a
former employee of the Company or any Parent, Subsidiary or Affiliate of the
Company who is receiving compensation for prior services (other than benefits
under a tax-qualified pension plan); (iii) a current or former officer of the
Company or any Parent, Subsidiary or Affiliate of the Company; or (iv) currently
receiving compensation for personal services in any capacity, other than as a
director, from the Company or any Parent, Subsidiary or Affiliate of the
Company; provided, however, that at such time as the term "Outside Director", as
used in Section 162(m) is defined in regulations promulgated under Section
162(m) of the Code, "Outside Director" shall have the meaning set forth in such
regulations, as amended from time to time and as interpreted by the Internal
Revenue Service.
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"Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if at the time of the granting of
an Award under the Plan, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"Participant" means a person who receives an Award under the Plan.
"Plan" means this VERITAS Software Corporation 1993 Equity Incentive
Plan, as amended from time to time.
"Restricted Stock Award" means an award of Shares pursuant to Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock reserved for
issuance under the Plan, as adjusted pursuant to Sections 2 and 15, and any
successor security.
"Stock Bonus" means an award of Shares, or cash in lieu of Shares,
pursuant to Section 7.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Award, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
"Termination" or "Terminated" means, for purposes of the Plan with
respect to a Participant, that the Participant has ceased to provide services as
an employee, director, consultant, independent contractor or adviser, to the
Company or a Parent, Subsidiary or Affiliate of the Company, except in the case
of sick leave, military leave, or any other leave of absence approved by the
Committee, provided, that such leave is for a period of not more than ninety
(90) days, or reinstatement upon the expiration of such leave is guaranteed by
contract or statute. The Committee shall have sole discretion to determine
whether a Participant has ceased to provide services and the effective date on
which the Participant ceased to provide services (the "Termination Date").
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EXHIBIT 4.07
VERITAS SOFTWARE CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
ADOPTED BY THE BOARD OF DIRECTORS ON OCTOBER 1, 1993,
AMENDED JULY 20, 1994, AMENDED APRIL 17, 1996,
AMENDED JANUARY 12, 1997 AND AMENDED MAY 27, 1999
1. Establishment of Plan
VERITAS Software Corporation, a corporation organized under the laws of the
State of California, any successor corporation thereto and any corporation that
assumes the Plan (the "Company") proposes to grant options for purchase of the
Company's Common Stock (references to Common Stock herein includes any successor
security thereto) to eligible employees of the Company and its Subsidiaries (as
hereinafter defined) pursuant to this Employee Stock Purchase Plan (this
"Plan"). For purposes of this Plan, "Parent Corporation" and "Subsidiary"
(collectively, "Subsidiaries") shall have the same meanings as "parent
corporation" and "subsidiary corporation" in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code"). The
Company intends the Plan to qualify as an "employee stock purchase plan" under
Section 423 of the Code (including any amendments to or replacements of such
section), and the Plan shall be so construed. Any term not expressly defined in
the Plan but defined for purposes of Section 423 of the Code shall have the same
definition herein. A total of 4,000,000 shares of the Company's Common Stock is
reserved for issuance under the Plan. In addition, on each January 1, the
aggregate number of shares of the Company's Common Stock reserved for issuance
under this Plan shall be increased automatically by a number of shares equal to
one percent (1%) of the total outstanding shares of the Company as of the
immediately preceding December 31; provided, however, that such increase shall
in no event exceed 2,000,000 shares per year. Such numbers shall be subject to
adjustments effected in accordance with Section 14 of the Plan.
2. Purposes
The purpose of the Plan is to provide employees of the Company and
Subsidiaries designated by the Board of Directors of the Company (the "Board")
as eligible to participate in the Plan with a convenient means of acquiring an
equity interest in the Company through payroll deductions, to enhance such
employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.
3. Administration
This Plan may be administered by the Board or a committee appointed by the
Board (the "Committee"). As used in this Plan, references to the "Committee"
shall mean either such committee or the Board if no committee has been
established. Subject to the provisions of the Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of
interpretation or application of the Plan shall be determined by the Board and
its decisions shall be final and binding upon all participants. Members of the
Board shall receive no compensation for their services in connection with the
administration of the Plan, other than standard fees as established from time to
time by the Board for services rendered by Board members serving on Board
committees. All expenses incurred in connection with the administration of the
Plan shall be paid by the Company.
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4. Eligibility
Any employee of the Company or the Subsidiaries is eligible to participate
in an Offering Period (as hereinafter defined) under the Plan except the
following:
(a) employees who are not employed by the Company or Subsidiaries on the
fifteenth (15th) day of the month before the beginning of such Offering Period;
provided, however that employees who are employed by the Company or Subsidiaries
on the date the NSMG Combination (as hereinafter defined) is consummated and
satisfy all other eligibility requirements will be eligible to participate in
the Additional Offering Period (as hereinafter defined):
(b) employees who are customarily employed for less than 20 hours per
week;
(c) employees who are customarily employed for less than 5 months in a
calendar year;
(d) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock or who, as a result of being granted an option
under the Plan with respect to such Offering Period, would own stock or hold
options to purchase stock possessing 5 percent or more of the total combined
voting power or value of all classes of stock of the Company or any of its
Subsidiaries.
5. Offering Dates
The Offering Periods of the Plan (the "Offering Period") shall be of twenty
four (24) months duration commencing on August 16 and February 16 of each year
and ending on the second February 15 and August 15, respectively, thereafter;
provided, however, that if the merger with VERITAS Holding Corporation (the
"NSMG Combination") is consummated on or after February 16, 1999 and before
August 16, 1999, an additional Offering Period (the "Additional Offering
Period") shall commence on the date the NSMG Combination is consummated and
shall end on February 15, 2001. Except for the Additional Offering Period, each
Offering Period shall consist of four (4) six-month purchase periods
(individually, a "Purchase Period") during which payroll deductions of the
participants are accumulated under this Plan. The Additional Offering Period
shall consist of no fewer than three Purchase Periods, any of which may be
greater or less than six months as determined by the Committee. The first
business day of each Offering Period is referred to as the "Offering Date". The
last business day of each Purchase Period is referred to as the "Purchase Date".
The Board shall have the power to change the duration of Offering Periods or
Purchase Periods with respect to future offerings without shareholder approval
if such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period or Purchase Period to be affected. Any
Offering Period and Purchase Period that is in progress on the date that the
Plan is assumed by a corporation shall continue unchanged.
6. Participation in the Plan
Eligible employees may become participants in an Offering Period under the
Plan on the first Offering Date after satisfying the eligibility requirements by
delivering a subscription agreement to the Company's or Subsidiary's (whichever
employs such employee) treasury department (the "Treasury Department") no later
than the five (5) business days prior to such Offering Date unless a later time
for filing the subscription agreement authorizing payroll deductions is set by
the Board for all eligible employees with
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respect to a given Offering Period. An eligible employee who does not deliver a
subscription agreement to the Treasury Department by such date after becoming
eligible to participate in such Offering Period shall not participate in that
Offering Period or any subsequent Offering Period unless such employee enrolls
in the Plan by filing a subscription agreement with the Treasury Department not
later than the 15th day of the month preceding a subsequent Offering Date. Once
an employee becomes a participant in an Offering Period, such employee will
automatically participate in the Offering Period commencing immediately
following the last day of the prior Offering Period unless the employee
withdraws from the Plan or terminates further participation in the Offering
Period as set forth in Section 11 below. Such participant is not required to
file any additional subscription agreement in order to continue participation in
the Plan. A participant in the Plan may participate only in one Offering Period
at any time.
7. Grant of Option on Enrollment
Enrollment by an eligible employee in the Plan with respect to an Offering
Period will constitute the grant (as of the Offering Date) by the Company to
such employee of an option to purchase on each Purchase Date in such Offering
Period up to that number of shares of Common Stock of the Company determined by
dividing the amount accumulated in such employee's payroll deduction account
during such Purchase Period by the lower of (i) eighty-five percent (85%) of the
fair market value of a share of the Company's Common Stock on the Offering Date
(the "Entry Price") or (ii) eighty-five percent (85%) of the fair market value
of a share of the Company's Common Stock on the Purchase Date; provided,
however, that the number of shares of the Company's Common Stock subject to any
option granted pursuant to this Plan shall not exceed the lesser of (a) the
maximum number of shares set by the Board pursuant to Section 10(c) below with
respect to each applicable Purchase Period, or (b) 200% of the number of shares
determined by using 85% of the fair market value of a share of the Company's
Common Stock on the Offering Date as the denominator. Fair market value of a
share of the Company's Common Stock shall be determined as provided in Section 8
hereof.
8. Purchase Price
The purchase price per share at which a share of Common Stock will be sold
in any Offering Period shall be 85 percent of the lesser of:
(a) The fair market value on the applicable Offering Date; or
(b) The fair market value on the applicable Purchase Date in such
Offering Period.
For purposes of the Plan, the term "fair market value" on a given date
shall mean the fair market value of the Company's Common Stock as determined by
the Committee from time to time in good faith. If a public market exists for the
shares, the fair market value shall be the average of the last reported bid and
asked prices for the Common Stock of the Company on the last trading day prior
to the date of determination, or, in the event the Common Stock of the Company
is listed on the Nasdaq National Market, the fair market value shall be the
average of the high and low prices of the Common Stock on the determination date
as quoted on the Nasdaq National Market and reported in The Wall Street Journal.
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<PAGE> 4
9. Payment of Purchase Price; Changes in Payroll Deductions; Issuance of Shares
(a) The purchase price of the shares is accumulated by regular payroll
deductions made during each Purchase Period. The deductions are made as a
percentage of the participant's compensation in one percent increments not less
than 2 percent nor greater than 10 percent, not to exceed $25,000 per year or
such lower limit set by the Committee. Compensation shall mean all W-2
compensation, including, but not limited to base salary, wages, commissions,
overtime, shift premiums and bonuses, plus draws against commissions; provided,
however, that for purposes of determining a participant's compensation, any
election by such participant to reduce his or her regular cash remuneration
under Sections 125 or 401(k) of the Code shall be treated as if the participant
did not make such election. Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Offering
Period unless sooner altered or terminated as provided in the Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during an Offering Period by filing with the Treasury Department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than 15 days after
the Treasury Department's receipt of the authorization and shall continue for
the remainder of the Offering Period unless changed as described below. Such
change in the rate of payroll deductions may be made at any time during an
Offering Period, but not more than one change may be made effective during any
Purchase Period. A participant may increase or decrease the rate of payroll
deductions for any subsequent Offering Period by filing with the Treasury
Department a new authorization for payroll deductions not later than the 15th
day of the month before the beginning of such Offering Period.
(c) All payroll deductions made for a participant are credited to his or
her account under the Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions.
(d) On each Purchase Date, so long as the Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under the Plan and have all payroll
deductions accumulated in the account maintained on behalf of the participant as
of that date returned to the participant, the Company shall apply the funds then
in the participant's account to the purchase of whole shares of Common Stock
reserved under the option granted to such participant with respect to the
Offering Period to the extent that such option is exercisable on the Purchase
Date. The purchase price per share shall be as specified in Section 8 of the
Plan. Any cash remaining in a participant's account after such purchase of
shares shall be refunded to such participant in cash, without interest;
provided, however, that any amount remaining in such participant's account on a
Purchase Date which is less than the amount necessary to purchase a full share
of Common Stock of the Company shall be carried forward, without interest, into
the next Purchase Period or Offering Period, as the case may be. In the event
that the Plan has been oversubscribed, all funds not used to purchase shares on
the Purchase Date shall be returned to the participant, without interest. No
Common Stock shall be purchased on a Purchase Date on behalf of any employee
whose participation in the Plan has terminated prior to such Purchase Date.
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<PAGE> 5
(e) As promptly as practicable after the Purchase Date, the Company shall
arrange the delivery to each participant of a certificate representing the
shares purchased upon exercise of his option.
(f) During a participant's lifetime, such participant's option to purchase
shares hereunder is exercisable only by him or her. The participant will have no
interest or voting right in shares covered by his or her option until such
option has been exercised. Shares to be delivered to a participant under the
Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse.
10. Limitations on Shares to be Purchased
(a) No employee shall be entitled to purchase stock under the Plan at a
rate which, when aggregated with his or her rights to purchase stock under all
other employee stock purchase plans of the Company or any Subsidiary, exceeds
$25,000 in fair market value, determined as of the Offering Date (or such other
limit as may be imposed by the Code) for each calendar year in which the
employee participates in the Plan. The Company shall automatically suspend the
payroll deductions of any participant as necessary to enforce such limit
provided that when the Company automatically resumes such payroll deductions,
the Company must apply the rate in effect immediately prior to such suspension.
(b) No more than 200% of the number of shares determined by using 85% of
the fair market value of a share of the Company's Common Stock on the Offering
Date as the denominator may be purchased by a participant on any single Purchase
Date.
(c) No employee shall be entitled to purchase more than the Maximum Share
Amount (as defined below) on any single Purchase Date. Not less than thirty days
prior to the commencement of any Purchase Period, the Board may, in its sole
discretion, set a maximum number of shares which may be purchased by any
employee at any single Purchase Date (hereinafter the "Maximum Share Amount").
In no event shall the Maximum Share Amount exceed the amounts permitted under
Section 10(b) above. If a new Maximum Share Amount is set, then all participants
must be notified of such Maximum Share Amount not less than fifteen days prior
to the commencement of the next Purchase Period. Once the Maximum Share Amount
is set, it shall continue to apply with respect to all succeeding Purchase Dates
and Purchase Periods unless revised by the Board as set forth above.
(d) If the number of shares to be purchased on a Purchase Date by all
employees participating in the Plan exceeds the number of shares then available
for issuance under the Plan, the Company will make a pro rata allocation of the
remaining shares in as uniform a manner as shall be practicable and as the Board
shall determine to be equitable. In such event, the Company shall give written
notice of such reduction of the number of shares to be purchased under a
participant's option to each participant affected thereby.
(e) Any payroll deductions accumulated in a participant's account which are
not used to purchase stock due to the limitations in this Section 10 shall be
returned to the participant as soon as practicable after the end of the Purchase
Period or Offering Period, as the case may be, without interest.
11. Withdrawal
(a) Each participant may withdraw from an Offering Period under the Plan by
signing and delivering to the Treasury Department notice on a form provided for
such
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<PAGE> 6
purpose. Such withdrawal may be elected at any time at least 15 days prior to
the end of a Purchase Period.
(b) Upon withdrawal from the Plan, the accumulated payroll deductions shall
be returned to the withdrawn participant, without interest, and his or her
interest in the Plan shall terminate. In the event a participant voluntarily
elects to withdraw from the Plan, he or she may not resume his or her
participation in the Plan during the same Offering Period, but he or she may
participate in any Offering Period under the Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth above for initial participation in
the Plan.
(c) A participant may participate in the current Purchase Period under an
Offering Period (the "Current Offering Period") and enroll in the Offering
Period commencing immediately after such Purchase Period (the "New Offering
Period") by (i) withdrawing from participation in the Current Offering Period
effective as of the last day of a Purchase Period within that Offering Period
and (ii) enrolling in the New Offering Period. Such withdrawal and enrollment
shall be effected by filing with the Treasury Department at least 15 days prior
to the end of an Offering Period such form or forms as are provided for such
purposes.
12. Termination of Employment
Termination of a participant's employment for any reason, including
retirement, death or the failure of a participant to remain an eligible
employee, immediately terminates his or her participation in the Plan. In such
event, the payroll deductions credited to the participant's account will be
returned to him or her or, in the case of his or her death, to his or her legal
representative, without interest. For purposes of this Section 12, an employee
will not be deemed to have terminated employment or failed to remain in the
continuous employ of the Company in the case of sick leave, military leave, or
any other leave of absence approved by the Board; provided that such leave is
for a period of not more than ninety (90) days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
13. Return of Payroll Deductions
In the event a participant's interest in the Plan is terminated by
withdrawal, termination of employment or otherwise, or in the event the Plan is
terminated by the Board, the Company shall promptly deliver to the participant
all payroll deductions credited to his account. No interest shall accrue on the
payroll deductions of a participant in the Plan.
14. Capital Changes
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each option under the Plan which has
not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split or the payment of a stock
dividend (but only on the Common Stock) or any other increase or decrease in the
number of shares of Common Stock effected without
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<PAGE> 7
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under the Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, each option under
the Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock. If the Board makes an
option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the participant that the option
shall be fully exercisable for a period of twenty (20) days from the date of
such notice, and the option will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, or
in the event of the Company being consolidated with or merged into any other
corporation.
15. Nonassignability
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
(other than by will, the laws of descent and distribution or as provided in
Section 22 hereof) by the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect.
16. Reports
Individual accounts will be maintained for each participant in the Plan.
Each participant shall receive promptly after the end of each Purchase Period a
report of his or her account setting forth the total payroll deductions
accumulated, the number of shares purchased, the per share price thereof and the
remaining cash balance, if any, carried forward to the next Purchase Period or
Offering Period, as the case may be.
17. Notice of Disposition
Each participant shall notify the Company if the participant disposes of
any of the shares purchased in any Offering Period pursuant to this Plan if such
disposition occurs
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<PAGE> 8
within two years from the Offering Date or within one year from the Purchase
Date on which such shares were purchased (the "Notice Period"). Unless such
participant is disposing of any of such shares during the Notice Period, such
participant shall keep the certificates representing such shares in his or her
name (and not in the name of a nominee) during the Notice Period. The Company
may, at any time during the Notice Period, place a legend or legends on any
certificate representing shares acquired pursuant to the Plan requesting the
Company's transfer agent to notify the Company of any transfer of the shares.
The obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.
18. No Rights to Continued Employment
Neither this Plan nor the grant of any option hereunder shall confer any
right on any employee to remain in the employ of the Company or any Subsidiary,
or restrict the right of the Company or any Subsidiary to terminate such
employee's employment.
19. Equal Rights and Privileges
All eligible employees shall have equal rights and privileges with respect
to the Plan so that the Plan qualifies as an "employee stock purchase plan"
within the meaning of Section 423 or any successor provision of the Code and the
related regulations. Any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall, without further act or
amendment by the Company or the Board, be reformed to comply with the
requirements of Section 423. This Section 19 shall take precedence over all
other provisions in the Plan.
20. Notices
All notices or other communications by a participant to the Company under
or in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
21. Term; Shareholder Approval
This Plan shall become effective on the date that it is adopted by the
Board of the Company. This Plan shall be approved by the stockholders of the
Company, in any manner permitted by applicable corporate law, within twelve
months before or after the date this Plan is adopted by the Board. No purchase
of shares pursuant to the Plan shall occur prior to such shareholder approval.
The Plan shall continue until the earlier to occur of termination by the Board,
issuance of all of the shares of Common Stock reserved for issuance under the
Plan, or one (1) year from the adoption of the Plan by the Board (unless
extended by the Board for a period of up to ten (10) years from the adoption
date.)
22. Designation of Beneficiary
(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to the end of a
Purchase Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to a Purchase Date.
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<PAGE> 9
(b) Such designation of beneficiary may be changed by the participant at
any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares or
cash to the executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares
Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
24. Applicable Law
The Plan shall be governed by the substantive laws (excluding the conflict
of laws rules) of the State of California.
25. Amendment or Termination of the Plan
The Board may at any time amend, terminate or extend the term of the Plan,
except that any such termination cannot affect options previously granted under
the Plan, nor may any amendment make any change in an option previously granted
which would adversely affect the right of any participant, nor may any amendment
be made without approval of the stockholders of the Company obtained in
accordance with Section 21 hereof within 12 months of the adoption of such
amendment (or earlier if required by Section 21) if such amendment would:
(a) increase the number of shares that may be issued under the Plan; or
(b) change the designation of the employees (or class of employees)
eligible for participation in the Plan.
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<PAGE> 1
EXHIBIT 4.09
SEAGATE SOFTWARE, INC.
1996 STOCK OPTION PLAN
(amended and restated, effective June 28, 1996)
(amended April 1999)
1. Purposes of the plan. The purposes of this stock option plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees and consultants of
the company and its subsidiaries and to promote the success of the company's
business. Options granted under the plan may be incentive stock options (as
defined under section 422 of the code) or nonstatutory stock options, as
determined by the Administrator at the time of grant of an option and subject to
the applicable provisions of section 422 of the code, as amended, and the
regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the board or any of its committees appointed
pursuant to section 4 of the plan.
(b) "Board" means the board of directors of the company.
(c) "Code" means the internal revenue code of 1986, as amended.
(d) "Committee" means a committee appointed by the board of directors
in accordance with section 4 of the plan.
(e) "Common Stock" means the common stock of the company.
(f) "Company" means Seagate Software, Inc., a Delaware corporation.
(g) "Consultant" means any person who is engaged by the company or any
parent or subsidiary to render consulting or advisory services and is
compensated for such services, and any director of the company whether
compensated for such services or not. If and in the event the company registers
any class of any equity security pursuant to the Exchange Act, the term
consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the company.
(h) "continuous status as an employee or consultant" means that the
employment or consulting relationship with the company, any parent, or
subsidiary, is not interrupted or terminated. Continuous status as an employee
or consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the company or (ii) transfers between locations of the
company or between the company, its parent, any subsidiary, or any successor. A
leave of absence approved by the company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the company. For purposes of incentive stock options, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract, including company policies. If reemployment
upon expiration of a leave of absence approved by the company is not so
guaranteed, on the 181st day of such leave any incentive stock option held by
the Optionee shall cease to be treated as an incentive stock option and shall be
treated for tax purposes as a nonstatutory stock option.
(i) "Employee" means any person, including officers and directors,
employed by the company or any parent or subsidiary of the company. The payment
of a director's fee by the company shall not be sufficient to constitute
"employment" by the company.
(j) "Exchange Act" means the securities Exchange Act of 1934, as
amended.
(k) "fair market value" means, as of any date, the value of common
stock determined as follows:
<PAGE> 2
(i) if the common stock is listed on any established stock
exchange or a national market system, including without limitation the
Nasdaq national market or the Nasdaq smallcap market of the Nasdaq
stock market, its fair market value shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system for the last market trading day prior
to the time of determination, as reported in the Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) if the common stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its fair market
value shall be the mean between the high bid and low asked prices for
the common stock on the last market trading day prior to the day of
determination, or;
(iii) in the absence of an established market for the common
stock, the fair market value thereof shall be determined in good faith
by the Administrator.
(l) "Incentive Stock Option" means an option intended to qualify as an
incentive stock option within the meaning of section 422 of the code.
(m) "Nonstatutory Stock Option" means an option not intended to qualify
as an incentive stock option.
(n) "Officer" means a person who is an officer of the company within
the meaning of section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(o) "Option" means a stock option granted pursuant to the plan.
(p) "Optioned Stock" means the common stock subject to an option.
(q) "Optionee" means an employee or consultant who receives an option.
(r) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in section 424(e) of the code.
(s) "Plan" means this 1996 stock option plan.
(t) "Section 16(b) " means section 16(b) of the Exchange Act.
(u) "Share" means a share of the common stock, as adjusted in
accordance with section 11 below.
(v) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in section 424(f) of the code.
3. Stock subject to the plan. Subject to the provisions of section 11 of the
plan, the maximum aggregate number of shares which may be optioned and sold
under the plan is sixteen million six hundred thousand (16,600,000) shares. The
shares may be authorized, but unissued, or reacquired common stock.
If an option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an option exchange program, the
unpurchased shares which were subject thereto shall become available for future
grant or sale under the plan (unless the plan has terminated); provided,
however, that shares that have actually been issued under the plan shall not be
returned to the plan and shall not become available for future distribution
under the plan, except that if unvested shares are repurchased by the company at
their original purchase price, and the original purchaser of such shares did not
receive any benefits of ownership of such shares, such shares shall become
available for future grant under the plan. For purposes of the preceding
sentence, voting rights shall not be considered a benefit of share ownership.
<PAGE> 3
4. Administration of the Plan.
(a) Initial Plan Procedure. Prior to the date, if any, upon which the
company becomes subject to the Exchange Act, the plan shall be administered by
the board or a committee appointed by the board.
(b) Plan Procedure after the Date, if any, upon which the Company
becomes subject to the Exchange Act.
(i) Administration with respect to Directors and Officers.
With respect to grants of options to employees who are also officers or
directors of the company, the plan shall be administered by (a) the
board if the board may administer the plan in compliance with the rules
under Rule 16b-3 promulgated under the Exchange Act or any successor
thereto ("Rule 16b-3") relating to the disinterested administration of
employee benefit plans under which section 16(b) exempt discretionary
grants and awards of equity securities are to be made, or (b) a
committee designated by the board to administer the plan, which
committee shall be constituted to comply with the rules under Rule
16b-3 relating to the disinterested administration of employee benefit
plans under which section 16(b) exempt discretionary grants and awards
of equity securities are to be made. Once appointed, such committee
shall continue to serve in its designated capacity until otherwise
directed by the board. From time to time the board may increase the
size of the committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
committee and thereafter directly administer the plan, all to the
extent permitted by the rules under Rule 16b-3 relating to the
disinterested administration of employee benefit plans under which
section 16(b) exempt discretionary grants and awards of equity
securities are to be made.
(ii) Multiple Administrative Bodies. If permitted by Rule
16b-3, the plan may be administered by different bodies with respect to
directors, non-director officers and employees who are neither
directors nor officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of options to employees or
consultants who are neither directors nor officers of the company, the
plan shall be administered by (a) the board or (b) a committee
designated by the board, which committee shall be constituted in such a
manner as to satisfy the legal requirements relating to the
administration of incentive stock option plans, if any, of state
corporate and securities laws, of the code, and of any applicable stock
exchange (the "applicable laws"). Once appointed, such committee shall
continue to serve in its designated capacity until otherwise directed
by the board. From time to time the board may increase the size of the
committee and appoint additional members thereof, remove members (with
or without cause) and appoint new members in substitution therefor,
fill vacancies, however caused, and remove all members of the committee
and thereafter directly administer the plan, all to the extent
permitted by the applicable laws.
(c) Powers of the Administrator. Subject to the provisions of the plan
and, in the case of a committee, the specific duties delegated by the board to
such committee, and subject to the approval of any relevant authorities,
including the approval, if required, of any stock exchange upon which the common
stock is listed, the Administrator shall have the authority, in its discretion:
(i) to determine the fair market value of the common stock, in
accordance with section 2(k) of the plan;
(ii) to select the consultants and employees to whom options
may from time to time be granted hereunder;
(iii) to determine whether and to what extent options are
granted hereunder;
(iv) to determine the number of shares of common stock to be
covered by each such award granted hereunder;
<PAGE> 4
(v) to approve forms of agreement for use under the plan;
(vi) to determine the terms and conditions of any award
granted hereunder;
(vii) to allow Optionees to satisfy withholding tax
obligations by electing to have the company withhold from the shares to
be issued upon exercise of an option that number of shares having a
fair market value equal to the amount required to be withheld. The fair
market value of the shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined. All
elections by Optionees to have shares withheld for this purpose shall
be made in such form and under such conditions as the Administrator may
deem necessary or advisable;
(viii) to reduce the exercise price of any option to the then
current fair market value if the fair market value of the common stock
covered by such option has declined since the date the option was
granted; and
(ix) to construe and interpret the terms of the plan and
awards granted pursuant to the plan.
(d) Effect of Administrator's Decision. All decisions, determinations
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any options.
5. Eligibility.
(a) Nonstatutory Stock Options may be granted to employees and
consultants. Incentive stock options may be granted only to employees. An
employee or consultant who has been granted an option may, if otherwise
eligible, be granted additional options.
(b) Each option shall be designated in the written option agreement as
either an incentive stock option or a nonstatutory stock option. However,
notwithstanding such designation, to the extent that the aggregate fair market
value of the shares with respect to which incentive stock options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the company and any parent or subsidiary) exceeds $100,000, such
options shall be treated as nonstatutory stock options. For purposes of this
section 5(b), incentive stock options shall be taken into account in the order
in which they were granted. The fair market value of the shares shall be
determined as of the time the option with respect to such shares is granted.
(c) The Plan shall not confer upon any Optionee any right with respect
to continuation of employment or consulting relationship with the company, nor
shall it interfere in any way with his or her right or the company's right to
terminate his or her employment or consulting relationship at any time, with or
without cause.
(d) Upon the company or a successor corporation issuing any class of
common equity securities required to be registered under section 12 of the
Exchange Act or upon the plan being assumed by a corporation having a class of
common equity securities required to be registered under section 12 of the
Exchange Act, the following limitations shall apply to grants of options to
employees:
(i) no employee shall be granted, in any fiscal year of the
company, options to purchase more than 5,000,000 shares.
(ii) in connection with his or her initial employment, an
employee may be granted options to purchase up to an additional
3,000,000 shares which shall not count against the limit set forth in
subsection (i) above.
(iii) the foregoing limitations shall be adjusted
proportionately in connection with any change in the company's
capitalization as described in section 11.
<PAGE> 5
(iv) if an option is cancelled in the same fiscal year of the
company in which it was granted (other than in connection with a
transaction described in section 11), the cancelled option will be
counted against the limit set forth in subsection (i) above. For this
purpose, if the exercise price of an option is reduced, the transaction
will be treated as a cancellation of the option and the grant of a new
option.
6. Term of Plan. The plan shall become effective upon the earlier to occur of
its adoption by the board of directors or its approval by the stockholders of
the company, as described in section 17 of the plan. It shall continue in effect
for a term of ten (10) years unless sooner terminated under section 13 of the
plan.
7. Term of Option. The term of each option shall be the term stated in the
option agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof. However, in the case of an incentive
stock option granted to an Optionee who, at the time the option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the company or any parent or subsidiary, the term of the
option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the option agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the shares to be issued pursuant
to exercise of an option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an incentive stock option
(a) granted to an employee who, at the time of the
grant of such incentive stock option, owns stock representing
more than ten percent (10%) of the voting power of all classes
of stock of the company or any parent or subsidiary, the per
share exercise price shall be no less than one hundred ten
percent (110%) of the fair market value per share on the date
of grant.
(b) granted to any employee other than an employee
described in the preceding paragraph, the per share exercise
price shall be no less than one hundred percent (100%) of the
fair market value per share on the date of grant.
(ii) In the case of a nonstatutory stock option
(a) granted to a person who, at the time of the grant
of such option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the
company or any parent or subsidiary, the per share exercise
price shall be no less than one hundred ten percent (110%) of
the fair market value per share on the date of the grant.
(b) granted to any person, the per share exercise
price shall be no less than eighty-five (85%) of the fair
market value per share on the date of grant.
(b) The consideration to be paid for the shares to be issued upon
exercise of an option, including the method of payment, shall be determined by
the Administrator (and, in the case of an incentive stock option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other shares which (x) in the case of shares
acquired upon exercise of an option have been owned by the Optionee for more
than six months on the date of surrender and (y) have a fair market value on the
date of surrender equal to the aggregate exercise price of the shares as to
which said option shall be exercised, (5) delivery of a properly executed
exercise notice together with such other documentation as the Administrator and
the broker, if applicable, shall require to effect an exercise of the option and
delivery to the company of the sale or loan proceeds required to pay the
exercise price, (6) the cancellation of a portion of the shares subject to the
option with a fair market value equal to the aggregate exercise price of the
shares as to which said option shall be exercised, or (7) any combination of the
foregoing methods of payment. In
<PAGE> 6
making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the company.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Administrator, including performance criteria with respect to
the company and/or the Optionee, and as shall be permissible under the terms of
the plan. An option may not be exercised for a fraction of a share. An option
shall be deemed to be exercised when written notice of such exercise has been
given to the company in accordance with the terms of the option by the person
entitled to exercise the option and full payment for the shares with respect to
which the option is exercised has been received by the company. Full payment
may, as authorized by the Administrator, consist of any consideration and method
of payment allowable under section 8(b) of the plan. Until the issuance (as
evidenced by the appropriate entry on the books of the company or of a duly
authorized transfer agent of the company) of the stock certificate evidencing
such shares, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the optioned stock, notwithstanding the
exercise of the option. The company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in section 11 of the
plan. Exercise of an option in any manner shall result in a decrease in the
number of shares which thereafter may be available, both for purposes of the
plan and for sale under the option, by the number of shares as to which the
option is exercised.
(b) Termination of Employment or Consulting Relationship. In the event
of termination of an Optionee's continuous status as an employee or consultant
with the company (but not in the event of an Optionee's change of status from
employee to consultant (in which case an employee's incentive stock option shall
automatically convert to a nonstatutory stock option on the date three (3)
months and one (1) day from the date of such change of status) or from
consultant to employee), such Optionee may, but only within such period of time
as is determined by the Administrator, of at least thirty (30) days, with such
determination in the case of an incentive stock option not exceeding three (3)
months after the date of such termination (but in no event later than the
expiration date of the term of such option as set forth in the option
agreement), exercise his or her option to the extent that Optionee was entitled
to exercise it at the date of such termination. To the extent that Optionee was
not entitled to exercise the option at the date of such termination, or if
Optionee does not exercise such option to the extent so entitled within the time
specified herein, the option shall terminate.
(c) Disability of Optionee. In the event of termination of an
Optionee's consulting relationship or continuous status as an employee as a
result of his or her disability, Optionee may, but only within twelve (12)
months from the date of such termination (and in no event later than the
expiration date of the term of such option as set forth in the option
agreement), exercise the option to the extent otherwise entitled to exercise it
at the date of such termination; provided, however, that if such disability is
not a "disability" as such term is defined in section 22(e)(3) of the code, in
the case of an incentive stock option such incentive stock option shall
automatically convert to a nonstatutory stock option on the day three (3) months
and one (1) day following such termination. To the extent that Optionee is not
entitled to exercise the option at the date of termination, or if Optionee does
not exercise such option to the extent so entitled within the time specified
herein, the option shall terminate, and the shares covered by such option shall
revert to the plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such option
as set forth in the notice of grant), by the Optionee's estate or by a person
who acquired the right to exercise the option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the option at the
date of death. If, at the time of death, the Optionee was not entitled to
exercise his or her entire option, the shares covered by the unexercisable
portion of the option shall immediately revert to the plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the option by
bequest or inheritance does not exercise the option within the time specified
herein, the option shall terminate, and the shares covered by such option shall
revert to the plan.
<PAGE> 7
(e) Rule 16b-3. Options granted to persons subject to section 16(b) of
the Exchange Act must comply with Rule 16b-3 and shall contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from section 16 of the Exchange Act with respect to plan
transactions.
10. Non-transferability of Options. Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee.
11. Adjustments upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the company, the number of shares of common stock covered by
each outstanding option, and the number of shares of common stock which have
been authorized for issuance under the plan but as to which no options have yet
been granted or which have been returned to the plan upon cancellation or
expiration of an option, as well as the price per share of common stock covered
by each such outstanding option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of common stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the common stock, or any other increase or decrease in the
number of issued shares of common stock effected without receipt of
consideration by the company; provided, however, that conversion of any
convertible securities of the company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of common stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the company, the Administrator shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the option will terminate immediately
prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the company with
or into another corporation, or the sale of substantially all of the assets of
the company, the option may be assumed or an equivalent option may be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the option is not assumed or
substituted, the option shall terminate as of the date of the closing of the
merger or sale of assets. For the purposes of this paragraph, the option shall
be considered assumed if, following the merger or sale of assets, the option
confers the right to purchase, for each share of optioned stock subject to the
option immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of common stock for each share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the merger or
sale of assets was not solely common stock of the successor corporation or its
parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the option for
each share of optioned stock subject to the option to be solely common stock of
the successor corporation or its parent equal in fair market value to the per
share consideration received by holders of common stock in the merger or sale of
assets.
12. Time of Granting Options. The date of grant of an option shall, for all
purposes, be the date on which the Administrator makes the determination
granting such option, or such other date as is determined by the board. Notice
of the determination shall be given to each employee or consultant to whom an
option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan. The board may at any time amend,
alter, suspend or discontinue the plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her written consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with sections 162(m) or 422 of the code (or any other
<PAGE> 8
applicable law or regulation, including the requirements of the nasd or an
established stock exchange), the company shall obtain stockholder approval of
any plan amendment in such a manner and to such a degree as required.
14. Conditions upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the company with
respect to such compliance.
As a condition to the exercise of an option, the company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the company, such a representation is required by any of
the aforementioned relevant provisions of law.
15. Reservation of Shares. The company, during the term of this plan, will at
all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of the plan. The inability of the company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the company's counsel to be necessary to the lawful
issuance and sale of any shares hereunder, shall relieve the company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.
16. Agreements. Options shall be evidenced by written agreements in such form as
the Administrator shall approve from time to time.
17. Stockholder Approval. Continuance of the plan shall be subject to approval
by the stockholders of the company within twelve (12) months before or after the
date the plan is adopted. Such stockholder approval shall be obtained in the
degree and manner required under applicable state and federal law and the rules
of any stock exchange upon which the common stock is listed.
18. Information to Optionees and Purchasers. The company shall provide to each
Optionee, not less frequently than annually, copies of annual financial
statements. The company shall also provide such statements to each individual
who acquires shares pursuant to the plan while such individual owns such shares.
The company shall not be required to provide such statements to key employees
whose duties in connection with the company assure their access to equivalent
information.
<PAGE> 9
SEAGATE SOFTWARE, INC.
1996 STOCK PLAN
STOCK OPTION AGREEMENT
Neither the fact that a registration statement or an application for a license
has been filed under this chapter with the state of new hampshire nor the fact
that a security is effectively registered or a person is licensed in the state
of new hampshire constitutes a finding by the secretary of state that any
document filed under rsa 421-b is true, complete and not misleading. Neither any
such fact nor the fact that an exemption or exception is available for a
security or a transaction means that the secretary of state has passed in any
way upon the merits or qualifications of, or recommended or given approval to,
any person, security, or transaction. It is unlawful to make, or cause to be
made, to any prospective purchaser, customer or client any representation
inconsistent with the provisions of this paragraph.
Unless otherwise defined herein, the terms defined in the plan shall have the
same defined meanings in this option agreement.
I. Notice of Stock Option Grant
[Optionee's name and address]
You have been granted an option to purchase common stock of the company, subject
to the terms and conditions of the plan and this option agreement, as follows:
Grant number _________________________
Date of grant _________________________
Vesting commencement date _________________________
Exercise price per share $________________________
Total number of shares granted _________________________
Total exercise price $________________________
Type of option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/expiration date: _________________________
Vesting Schedule:
You may exercise this option, in whole or in part, according to the following
vesting schedule:
20%, 20%, 30% and 30% of the shares subject to the option shall vest on each
anniversary of the vesting commencement date.
Termination Period:
You may exercise this option for thirty (30) days after your employment or
consulting relationship with the company terminates, or for such longer period
upon your death or disability as provided in this option agreement. If your
status
<PAGE> 10
changes from employee to consultant or consultant to employee, this option
agreement shall remain in effect. In no case may you exercise this option after
the term/expiration date as provided above.
II. Agreement
1. Grant of Option. Seagate software, Inc., a Delaware corporation (the
"Company"), hereby grants to the Optionee named in the notice of grant (the
"Optionee"), an option (the "option") to purchase the total number of shares of
common stock (the "shares") set forth in the notice of grant, at the exercise
price per share set forth in the notice of grant (the "exercise price") subject
to the terms, definitions and provisions of the 1996 stock option plan (the
"plan") adopted by the company, which is incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the plan shall have the
same defined meanings in this option agreement.
If designated in the notice of grant as an incentive stock option
("ISO"), this option is intended to qualify as an incentive stock option as
defined in section 422 of the code. Nevertheless, to the extent that it exceeds
the $100,000 rule of code section 422(d), this option shall be treated as a
nonstatutory stock option ("NSO").
2. Exercise of option.
(a) Right to Exercise. This option shall be exercisable during its term
in accordance with the vesting schedule set out in the notice of grant and with
the applicable provisions of the plan and this option agreement. In the event of
Optionee's death, disability or other termination of the employment or
consulting relationship, this option shall be exercisable in accordance with the
applicable provisions of the plan and this option agreement.
(b) Method of Exercise. This option shall be exercisable by written
notice (in the form attached as exhibit a) which shall state the election to
exercise the option, the number of shares in respect of which the option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of common stock as may be
required by the company pursuant to the provisions of the plan. Such written
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the secretary of the company. The written notice shall be
accompanied by payment of the exercise price. This option shall be deemed to be
exercised upon receipt by the company of such written notice accompanied by the
exercise price.
No shares will be issued pursuant to the exercise of an option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the shares may then be
listed. Assuming such compliance, for income tax purposes the shares shall be
considered transferred to the Optionee on the date on which the option is
exercised with respect to such shares.
1. Optionee's Representations. In the event the shares purchasable pursuant to
the exercise of this option have not been registered under the Securities Act of
1933, as amended, at the time this option is exercised, Optionee shall, if
required by the company, concurrently with the exercise of all or any portion of
this option, deliver to the company his or her investment representation
statement in the form attached hereto as exhibit b[, and shall read the
applicable rules of the commissioner of corporations attached to such investment
representation statement.]
2. Lock-up Period. Optionee hereby agrees that if so requested by the company or
any representative of the underwriters (the "managing underwriter") in
connection with any registration of the offering of any securities of the
company under the Securities Act, Optionee shall not sell or otherwise transfer
any shares or other securities of the company during the 180-day period (or such
longer period as may be requested in writing by the managing underwriter and
agreed to in writing by the company) (the "market standoff period") following
the effective date of a registration statement of the company filed under the
Securities Act; provided, however, that such restriction shall apply only to the
first registration statement of the company to become effective under the
Securities Act that includes securities to be sold on behalf of the company to
the public in an underwritten public offering under the Securities Act. The
company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such market standoff period.
<PAGE> 11
3. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) check;
(c) surrender of other shares of common stock of the company which (a)
in the case of shares acquired pursuant to the exercise of a company option,
have been owned by the Optionee for more than six (6) months on the date of
surrender, and (b) have a fair market value on the date of surrender equal to
the exercise price of the shares as to which the option is being exercised; or
(d) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the option and delivery to the company of the
sale or loan proceeds required to pay the exercise price.
4. Restrictions on Exercise. This option may not be exercised until such time as
the plan has been approved by the stockholders of the company, or if the
issuance of such shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
part 207 of title 12 of the code of federal regulations ("regulation g") as
promulgated by the federal reserve board.
5. Termination of Relationship. In the event an Optionee's continuous status as
an employee or consultant terminates, Optionee may, to the extent otherwise so
entitled at the date of such termination (the "termination date"), exercise this
option during the termination period set out in the notice of grant. To the
extent that Optionee was not entitled to exercise this option at the date of
such termination, or if Optionee does not exercise this option within the time
specified herein, the option shall terminate.
6. Disability of Optionee. Notwithstanding the provisions of section 7 above, in
the event of termination of an Optionee's consulting relationship or continuous
status as an employee as a result of his or her disability, Optionee may, but
only within twelve (12) months from the date of such termination (and in no
event later than the expiration date of the term of such option as set forth in
the option agreement), exercise the option to the extent otherwise entitled to
exercise it at the date of such termination; provided, however, that if such
disability is not a "disability" as such term is defined in section 22(e)(3) of
the code, in the case of an incentive stock option such incentive stock option
shall cease to be treated as an incentive stock option and shall be treated for
tax purposes as a nonstatutory stock option on the day three months and one day
following such termination. To the extent that Optionee was not entitled to
exercise the option at the date of termination, or if Optionee does not exercise
such option to the extent so entitled within the time specified herein, the
option shall terminate, and the shares covered by such option shall revert to
the plan.
7. Death of Optionee. In the event of termination of Optionee's continuous
status as an employee or consultant as a result of the death of Optionee, the
option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the date of expiration of the term of this
option as set forth in section 11 below), by Optionee's estate or by a person
who acquired the right to exercise the option by bequest or inheritance, but
only to the extent the Optionee could exercise the option at the date of death.
8. Non-transferability of Option. This option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of this
option shall be binding upon the executors, Administrators, heirs, successors
and assigns of the Optionee.
9. Term of Option. This option may be exercised only within the term set out in
the notice of grant, and may be exercised during such term only in accordance
with the plan and the terms of this option. The limitations set out in section 7
of the plan regarding options designated as incentive stock options and options
granted to more than ten percent (10%) stockholders shall apply to this option.
<PAGE> 12
10. Tax Consequences. Set forth below is a brief summary as of the date of this
option of some of the federal and state tax consequences of exercise of this
option and disposition of the shares. This summary is necessarily incomplete,
and the tax laws and regulations are subject to change. Optionee should consult
a tax adviser before exercising this option or disposing of the shares.
(a) Exercise of ISO. If this option qualifies as an ISO, there will be
no regular federal income tax liability or state income tax liability upon the
exercise of the option, although the excess, if any, of the fair market value of
the shares on the date of exercise over the exercise price will be treated as an
adjustment to the alternative minimum tax for federal tax purposes and may
subject the Optionee to the alternative minimum tax in the year of exercise.
(b) Exercise of ISO Following Disability. If the Optionee's continuous
status as an employee or consultant terminates as a result of disability that is
not total and permanent disability as defined in section 22(e)(3) of the code,
to the extent permitted on the date of termination, the Optionee must exercise
an ISO within three months of such termination for the ISO to be qualified as an
ISO.
(c) Exercise of Nonstatutory Stock Option. There may be a regular
federal income tax liability and state income tax liability upon the exercise of
a nonstatutory stock option. The Optionee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the fair market value of the shares on the date of exercise over the
exercise price. If Optionee is an employee or a former employee, the company
will be required to withhold from Optionee's compensation or collect from
Optionee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver shares if such withholding amounts
are not delivered at the time of exercise.
(d) Disposition of Shares. In the case of an NSO, if shares are held
for at least one year, any gain realized on disposition of the shares will be
treated as long-term capital gain for federal and state income tax purposes. In
the case of an ISO, if shares transferred pursuant to the option are held for at
least one year after exercise and are disposed of at least two years after the
date of grant, any gain realized on disposition of the shares will also be
treated as long-term capital gain for federal and state income tax purposes. If
shares purchased under an ISO are disposed of within such one-year period or
within two years after the date of grant, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the difference between the exercise price and the lesser of (1) the
fair market value of the shares on the date of exercise, or (2) the sale price
of the shares.
(e) Notice of Disqualifying Disposition of ISO Shares. If the option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the date of grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the company on the compensation income
recognized by the Optionee.
11. Entire Agreement; Governing Law. The plan is incorporated herein by
reference. The plan and this option agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the company and
Optionee. This agreement is governed by California law except for that body of
law pertaining to conflict of laws.
SEAGATE SOFTWARE, INC.,
a Delaware corporation
By:_____________________________________________
Executive Vice President, Corporate Development,
Chief Operating Officer, Seagate Software, Inc.
<PAGE> 13
Optionee acknowledges and agrees that the vesting of shares pursuant to the
option hereof is earned only by continuing consultancy or employment at the will
of the company (not through the act of being hired, being granted this option or
acquiring shares hereunder). Optionee further acknowledges and agrees that
nothing in this agreement, nor in the company's stock option plan which is
incorporated herein by reference, shall confer upon Optionee any right with
respect to continuation of employment or consultancy by the company, nor shall
it interfere in any way with Optionee's right or the company's right to
terminate Optionee's employment or consultancy at any time, with or without
cause.
Optionee acknowledges receipt of a copy of the plan and represents that Optionee
is familiar with the terms and provisions thereof, and hereby accepts this
option subject to all of the terms and provisions thereof. Optionee has reviewed
the plan and this option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this option and fully understands all
provisions of the option. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Administrator upon
any questions arising under the plan or this option. Optionee further agrees to
notify the company upon any change in the residence address indicated below.
Dated:
-------------------------------- --------------------------------
Optionee (print name)
SS#:
-------------------------------- --------------------------------
Optionee (signature)
Employee ID#: Residence Address:
-------------------------
Work Phone#:
--------------------------
Home Phone#:
--------------------------
DESIGNATION OF BENEFICIARY
In the event of my death, i hereby designate the following as my
beneficiary(ies) to receive all of my options that are unexercised at that time.
Name: (please print)
-----------------------------------------------------------
(first) (middle) (last)
Relationship
Dated:
-------------------------------- --------------------------------
Signature of Employee
CONSENT OF SPOUSE
The undersigned spouse of Optionee has read and hereby approves the terms and
conditions of the plan and this option agreement. In consideration of the
company's granting his or her spouse the right to purchase shares as set forth
in the plan and this option agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the plan and this option
agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the plan or this option agreement.
--------------------------------
Spouse of Optionee
<PAGE> 14
Exhibit A
SEAGATE SOFTWARE, INC.
1996 STOCK OPTION PLAN
EXERCISE NOTICE
Seagate Software, Inc.
Attn: Stock Plan Administration
P.O. Box 66360
Scotts Valley, CA 95067-0360
1. Exercise of Option. Effective as of today, ___________, 19__, the undersigned
("Optionee") hereby elects to exercise Optionee's option to purchase _________
shares of the common stock (the "shares") of Seagate Software, Inc. (the
"company") under and pursuant to the 1996 stock option plan, including all
amendments thereto (the "Plan") and the [ ] incentive [ ] nonstatutory stock
option agreement dated ________, 19 (the "option agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the plan and the option agreement and agrees to
abide by and be bound by their terms and conditions.
3. Rights as Stockholder. Until the stock certificate evidencing such shares is
issued (as evidenced by the appropriate entry on the books of the company or of
a duly authorized transfer agent of the company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the
optioned stock, notwithstanding the exercise of the option. The company shall
issue (or cause to be issued) such stock certificate promptly after the option
is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in section 11 of the plan.
Optionee shall enjoy rights as a stockholder until such time as Optionee
disposes of the shares or the company and/or its assignee(s) exercises the right
of first refusal hereunder. Upon such exercise, Optionee shall have no further
rights as a holder of the shares so purchased except the right to receive
payment for the shares so purchased in accordance with the provisions of this
agreement, and Optionee shall forthwith cause the certificate(s) evidencing the
shares so purchased to be surrendered to the company for transfer or
cancellation.
4. Company's Right of First Refusal. Before any shares held by Optionee or any
transferee (either being sometimes referred to herein as the "Holder") may be
sold or otherwise transferred (including transfer by gift or operation of law),
the company or its assignee(s) shall have a right of first refusal to purchase
the shares on the terms and conditions set forth in this section (the "right of
first refusal").
(a) Notice of Proposed Transfer. The holder of the shares shall deliver
to the company a written notice (the "notice") stating: (i) the holder's bona
fide intention to sell or otherwise transfer such shares; (ii) the name of each
proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number
of shares to be transferred to each proposed transferee; and (iv) the bona fide
cash price or other consideration for which the holder proposes to transfer the
shares (the "offered price"), and the holder shall offer the shares at the
offered price to the company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30)
days after receipt of the notice, the company and/or its assignee(s) may, by
giving written notice to the holder, elect to purchase all, but not less than
all, of the shares proposed to be transferred to any one or more of the proposed
transferees, at the purchase price determined in accordance with subsection (c)
below.
-6-
<PAGE> 15
(c) Purchase Price. The purchase price ("Purchase Price") for the
shares purchased by the company or its assignee(s) under this section shall be
the offered price. If the offered price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the board of directors of the company in good faith.
(d) Payment. Payment of the purchase price shall be made, at the option
of the company or its assignee(s), in cash (by check), by cancellation of all or
a portion of any outstanding indebtedness of the holder to the company (or, in
the case of repurchase by an assignee, to the assignee), or by any combination
thereof within 30 days after receipt of the notice or in the manner and at the
times set forth in the notice.
(e) Holder's Right to Transfer. If all of the shares proposed in the
notice to be transferred to a given proposed transferee are not purchased by the
company and/or its assignee(s) as provided in this section, then the holder may
sell or otherwise transfer such shares to that proposed transferee at the
offered price or at a higher price, provided that such sale or other transfer is
consummated within 120 days after the date of the notice and provided further
that any such sale or other transfer is effected in accordance with any
applicable securities laws and the proposed transferee agrees in writing that
the provisions of this section shall continue to apply to the shares in the
hands of such proposed transferee. If the shares described in the notice are not
transferred to the proposed transferee within such period, a new notice shall be
given to the company, and the company and/or its assignees shall again be
offered the right of first refusal before any shares held by the holder may be
sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary
contained in this section notwithstanding, the transfer of any or all of the
shares during the Optionee's lifetime or on the Optionee's death by will or
intestacy to the Optionee's immediate family or a trust for the benefit of the
Optionee's immediate family shall be exempt from the provisions of this section.
"immediate family" as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the shares so transferred subject to the
provisions of this section, and there shall be no further transfer of such
shares except in accordance with the terms of this section.
(g) Termination of Right of First Refusal. The right of first refusal
shall terminate as to any shares 90 days after the first sale of common stock of
the company to the general public pursuant to a registration statement filed
with and declared effective by the securities and exchange commission under the
Securities Act of 1933, as amended.
5. Optionee's Right to Sell to the Company.
(a) In the event that Optionee's employment with the company terminates
for any reason, Optionee shall have the right to sell to the company all (but
not less than all) of the Optionee's shares, at a per share purchase price equal
to Optionee's exercise price (the "repurchase price"). No payment shall be made
for the unexercised portion of any outstanding option. Optionee shall give the
company written notice of Optionee's intent to sell Optionee's shares to the
company within thirty (30) days of the termination of Optionee's employment with
the company.
(b) Within thirty (30) days of receiving the written notice required by
section 5(a), the company shall notify Optionee in writing (the "notice") of the
closing and shall specify in the notice the date and place for closing, which
closing shall occur not more than sixty (60) days after the company's receipt of
the Optionee's notice. At the closing, the company shall deliver the aggregate
repurchase price for the shares (pursuant to section 5(c)) and Optionee shall
deliver to the company the respective shares.
(c) Payment of the aggregate repurchase price shall be made, at the
option of the company in cash (by check), by cancellation of all or a portion of
any outstanding indebtedness of the Optionee to the company or by any
combination of the two. In addition, at its option, the company may elect to pay
the aggregate repurchase price to an account in the Optionee's name at a bank
selected by the company. The company shall avail itself of this option by a
notice in writing to the Optionee stating the name and address of the bank, date
of payment, and waiving the closing at the company's office.
-7-
<PAGE> 16
(d) Upon delivery of the notice and the payment of the aggregate
repurchase price in any of the ways described above, the company shall become
the legal and beneficial owner of the shares being repurchased and all rights
and interests therein or relating thereto, and the company shall have the right
to retain and transfer to its own name the number of shares being repurchased by
the company.
(e) Whenever the company shall be required to repurchase shares
hereunder, the company may designate and assign one or more employees, officers,
directors or shareholders of the company or other persons or organizations to
fulfill all or a part of the company's repurchase obligations under this
agreement and purchase all or a part of such shares.
6. Tax Consultation. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee's purchase or disposition of the shares.
Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
shares and that Optionee is not relying on the company for any tax advice.
7. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the company shall
cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the shares together
with any other legends that may be required by the company or by state or
federal securities laws:
The securities represented hereby have not been registered under the Securities
Act of 1933 (the "act") and may not be offered, sold or otherwise transferred,
pledged or hypothecated unless and until registered under the act or, in the
opinion of company counsel satisfactory to the issuer of these securities, such
offer, sale or transfer, pledge or hypothecation is in compliance therewith.
The shares represented by this certificate are subject to certain restrictions
on transfer and a right of first refusal held by the issuer or its assignee(s)
as set forth in the exercise notice between the issuer and the original holder
of these shares, a copy of which may be obtained at the principal office of the
issuer. Such transfer restrictions and right of first refusal are binding on
transferees of these shares.
[it is unlawful to consummate a sale or transfer of this security, or any
interest therein, or to receive any consideration therefor, without the prior
written consent of the commissioner of corporations of the state of California,
except as permitted in the commissioner's rules.
Optionee understands that transfer of the shares may be restricted by section
260.141.11 of the rules of the California corporations commissioner, a copy of
which is attached to exhibit b, the investment representation statement.]
(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) Refusal to Transfer. The company shall not be required (i) to
transfer on its books any shares that have been sold or otherwise transferred in
violation of any of the provisions of this agreement or (ii) to treat as owner
of such shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such shares shall have been so transferred.
8. Successors and Assigns. The company may assign any of its rights under this
agreement to single or multiple assignees, and this agreement shall inure to the
benefit of the successors and assigns of the company. Subject to the
restrictions on transfer herein set forth, this agreement shall be binding upon
Optionee and his or her heirs, executors, Administrators, successors and
assigns.
-8-
<PAGE> 17
9. Interpretation. Any dispute regarding the interpretation of this agreement
shall be submitted by Optionee or by the company forthwith to the company's
board of directors or the committee thereof that administers the plan, which
shall review such dispute at its next regular meeting. The resolution of such a
dispute by the board or committee shall be final and binding on the company and
on Optionee.
10. Governing Law; Severability. This agreement shall be governed by and
construed in accordance with the laws of California excluding that body of law
pertaining to conflicts of law. Should any provision of this agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.
11. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the united states mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
12. Further Instruments. The parties agree to execute such further instruments
and to take such further action as may be reasonably necessary to carry out the
purposes and intent of this agreement.
13. Delivery of Payment. Optionee herewith delivers to the company the full
exercise price for the shares.
14. Entire Agreement. The plan and notice of grant/option agreement are
incorporated herein by reference. This agreement, the plan, the option agreement
and the investment representation statement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the company and
Optionee.
Submitted By: Accepted By:
Optionee: Seagate Software, Inc.
- --------------------------------
(print name) By:
--------------------------------
Its:
- -------------------------------- -------------------------------
(signature)
Address: Address:
- -------------------------------- Seagate Software, Inc.
Attn: Stock Plan Administration
- -------------------------------- P.O. Box 66360
Scotts Valley, CA 95067-0360
-9-
<PAGE> 18
Exhibit B
INVESTMENT REPRESENTATION STATEMENT
Optionee:
Company: Seagate Software, Inc.
Security: common stock
Amount:
Date:
In connection with the purchase of the above-listed securities, the undersigned
Optionee represents to the company the following:
(a) Optionee is aware of the company's business affairs and financial condition
and has acquired sufficient information about the company to reach an informed
and knowledgeable decision to acquire the securities. Optionee is acquiring
these securities for investment for Optionee's own account only and not with a
view to, or for resale in connection with, any "distribution" thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
(b) Optionee acknowledges and understands that the securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the securities and exchange commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the company is under no obligation to register the securities. Optionee
understands that the certificate evidencing the securities will be imprinted
with a legend which prohibits the transfer of the securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the company, a legend prohibiting their transfer without the
consent of the commissioner of corporations of this state and any other legend
required under applicable state securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of the grant of the option to the Optionee, the exercise will be exempt
from registration under the Securities Act. In the event the company becomes
subject to the reporting requirements of section 13 or 15(d) of the securities
Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any
market stand-off agreement may require) the securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (1) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the company, (3) the amount of securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a form 144, if applicable.
In the event that the company does not qualify under Rule 701 at the time of
grant of the option, then the securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to
-1-
<PAGE> 19
occur not less than two years after the later of the date the securities were
sold by the company or the date the securities were sold by an affiliate of the
company, within the meaning of Rule 144; and, in the case of acquisition of the
securities by an affiliate, or by a non-affiliate who subsequently holds the
securities less than three years, the satisfaction of the conditions set forth
in sections (1), (2), (3) and (4) of the paragraph immediately above.
(e) Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with regulation a, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the staff of the securities and exchange commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
[(f) Optionee understands that the certificate evidencing the securities will be
imprinted with a legend which prohibits the transfer of the securities without
the consent of the commissioner of corporations of California. Optionee has read
the applicable commissioner's rules with respect to such restriction, a copy of
which is attached.]
Signature of Optionee:
--------------------------------
Date: , 19
-------------------- ---
-2-
<PAGE> 1
EXHIBIT 5.01
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94304
June 1, 1999
VERITAS Software Corporation
1600 Plymouth Street
Mountain View, California 94043
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement") to be filed by you with the Securities and
Exchange Commission (the "Commission") on or about June 1, 1999 in connection
with the registration under the Securities Act of 1933, as amended, of an
aggregate of 23,456,943 shares of your Common Stock, par value $0.001 per share
(the "Stock"), subject to issuance by you under the following circumstances:
(a) upon the exercise of outstanding options to purchase
shares of your common stock granted under the 1985 Stock
Option Plan (the "1985 Plan") of VERITAS Software
Corporation, a Delaware corporation and a predecessor of
yours ("Old VERITAS"), the 1991 Executive Stock Option
Plan (the "1991 Plan") of Old VERITAS and the 1992 Plan
(the "1992 Plan") of OpenVision Technologies, Inc., which
options are being assumed by you pursuant to the terms of
the Amended and Restated Agreement and Plan of
Reorganization dated April 15, 1999 entered into by and
among you, Old VERITAS, Seagate Technology, Inc., Seagate
Software, Inc. ("Seagate") and Seagate Software Network &
Storage Management Group, Inc. (the "Plan of
Reorganization");
(b) upon the exercise of outstanding options (and options yet
to be granted) to purchase shares of your common stock
under the 1993 Equity Incentive Plan (the "Equity
Incentive Plan") of Old VERITAS and the 1993 Directors
Stock Option Plan (the "Directors Plan") of Old VERITAS,
which Equity Incentive Plan and Directors Plan and options
granted thereunder are being assumed by you pursuant to
the Plan of Reorganization;
(c) upon purchase under the 1993 Employee Stock Purchase Plan
(the "Stock Purchase Plan") of Old VERITAS, which Stock
Purchase Plan is being assumed by you pursuant to the
terms of the Plan of Reorganization; and
(d) upon the exercise of options to purchase shares of your
common stock to be exchanged, pursuant to the terms of the
Plan of Reorganization, for options to purchase shares of
Seagate common stock held by former Seagate employees who
accept offers of employment with you and elect to so
exchange their Seagate options, which options were granted
under the 1996 Stock Option Plan (the "Seagate Option
Plan") of Seagate.
The plans referred to in clauses (a) through (d) above are
collectively referred to in this letter as the "Plans". In rendering this
opinion, we have examined the following:
<PAGE> 2
(1) your registration statement on Form S-4 (File Number
333-76531) filed with the Commission on April 19, 1999,
together with the exhibits filed as a part thereof,
including without limitation, each of the Plans and
related stock option grant and exercise agreements;
(2) the Registration Statement, together with the exhibits
filed as a part thereof;
(3) the Prospectuses prepared in connection with the
Registration Statement;
(4) the minutes of meetings and actions by written consent of
the stockholders and Board of Directors that are contained
in your minute books and the minute books of Old VERITAS,
that are in our possession; and
(4) the stock records for both you and Old VERITAS that you
have provided to us.
(5) a Management Certificate addressed to us and dated of even
date herewith executed by you containing certain factual
and other representations.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
documents reviewed by us and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from public
officials and records included in the documents referred to above. We have made
no independent investigation or other attempt to verify the accuracy of any of
such information or to determine the existence or non-existence of any other
factual matters; however, we are not aware of any facts that would lead us to
believe that the opinion expressed herein is not accurate.
Based upon the foregoing, it is our opinion that the 23,456,943
shares of Stock that may be issued and sold by you (a) upon the exercise of
stock options granted under the 1985 Plan, 1991 Plan and 1992 Plan and assumed
by you, (b) upon the exercise of stock options granted or to be granted under
the Equity Incentive Plan and the Directors Plan and assumed by you, (c) upon
purchase under the Stock Purchase Plan assumed by you, and (d) upon the exercise
of stock options granted in exchange for stock options granted under the Seagate
Option Plan, when issued and sold in accordance with the applicable plan and
stock option or purchase agreements to be entered into thereunder, and in the
manner referred to in the relevant Prospectus associated with the Registration
Statement, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to us, if any, in
the Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and is intended solely for
the your use as an exhibit to the Registration Statement for the purpose of the
above sale of the Stock and is not to be relied upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By: /s/ Fenwick & West LLP
---------------------------
Horace L. Nash, Partner
<PAGE> 1
EXHIBIT 23.02
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Options Granted Under 1985 Stock Option Plan, Options
Granted Under 1991 Executive Stock Option Plan, Options Granted Under 1992 Stock
Plan, 1993 Equity Incentive Plan, 1993 Directors Stock Option Plan, and the 1993
Employee Stock Purchase Plan of VERITAS Software Corporation, and the Options
Granted Under 1996 Stock Option Plan of Seagate Corporation, Inc. assumed by
VERITAS Software Corporation of our report dated January 27, 1999, with respect
to the consolidated financial statements and schedule of VERITAS Software
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1998, filed with the Securities Exchange Commission.
ERNST & YOUNG LLP
San Jose, California,
May 28, 1999
